A Primer on India’s Centre-State Finances (Functioning of India’s Fiscal Union)

I have been working on this area of Centre-State Finances/India’s Fiscal Union. It is an amazing amount of learning and I don’t think there is anything as vast as this area of Centre-State finances. There are so many concepts and issues.

So here is a paper written by your truly which should provide a start to those interested in the subject. It explains the flow of funds between Centre and Funds and concepts behind the several flows. I have provided some numbers from the Union Budget to bring more clarity and practical.

In a way, it helps understand the functioning of India’s fiscal union, a concept much in vogue these days. Much is written about US Fiscal Union and how it has helped US states avert the crisis. But still one does not know where to connect the dots with numbers. For this one needs to a deep dive into the US Federal Budget numbers and so on.

I have tried to connect these fiscal union ideas with facts and numbers for India. So, people know how to make sense of all these flows.

But then this subject is an ocean really. Lots to learn and unlearn. Will surely be writing more on the subject.

Comments/suggestions are welcome.

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